I don’t think of business books as having great opening lines. And Collins is no Melville (“Call me Ishmael.”), Dickens (“It was the best of times, it was the worst of times…”) or Nabokov (“Lolita, light of my life, fire of my loins.”), but he does get your attention when he opens with, “Good is the enemy of the great. And that is one of the key reasons why we have so little that becomes great.”
He continues, “We don’t have great schools, principally because we have good schools. We don’t have great government, principally because we have good government. Few people attain great lives, in large part because it is just so easy to settle for a good life. The vast majority of companies never become great, precisely because the vast majority become quite good—and that is their main problem.”
I’ve been re-reading Jim Collins’ Good to Great—an insightful book, and an easy read, about why some companies and teams make the leap from good to great and why others do not. I thought for this post, I’d share three of my favorite principles from it:
(1) Greatness is not primarily a function of circumstance; it is a matter of conscious choice and discipline. (See chapters one and six.)
In Good to Great, Collins and his research team present the results of a study that teased out, from a pool of over 1400 companies, 11 whose results were exceptional.
These companies, after their “leaps,” generated cumulative stock returns that beat the general stock market by an average of seven times in 15 years.
His recommendations for achieving this kind of success are complex, but throughout he shows us that it is important to make conscious, deliberate choices (see, for example, the Hedgehog concept) and to be disciplined.
“A culture of discipline is not just about action. It is about getting disciplined people who engage in disciplined thought and who then take disciplined action.”
(2) Great companies have great leaders, but these are special kinds of great leaders—Level 5 leaders. (See chapter two.)
“Level 5” leaders are not what we typically think of when we think of great organizational leaders. They are not flashy or showy. They have an extraordinary (and paradoxical) mix of humility and professional will. They are ambitious. But they are ambitious for the company, not for themselves.
As Bill Daniels likes to emphasize, they are often quiet people and not easy to find.
“Level 5 leaders are fanatically driven, infected with an incurable need to produce sustained results. They are resolved to do whatever it takes to make the company great, no matter how big or hard the decisions.”
In addition, they “display a compelling modesty, are self-effacing and understated. In contrast, two thirds of the comparison companies [companies that did not make the leap to greatness] had leaders with gargantuan personal egos that contributed to the demise or continued mediocrity of the company. ”
(3) Great companies tend to be less like foxes and more like hedgehogs. (See chapter five.)
Foxes tend to dazzle with complexity. They love all the moving parts, and they try to impress you by making things so complex other people can’t understand them.
Hedgehogs simplify. They know the world is complex, but they also know we can’t function unless we simplify it. Hedgehogs take one big, important idea and focus on that. “They simplify a complex world down to one, simple fundamental idea that is essentially right.”
Collins is careful not to claim that hedgehogs are always better than foxes. That simply is not true. But he says that in the world of leadership, hedgehogs win.
“To go from good to great requires a deep understanding of three intersecting circles translated into a simple, crystalline concept [the hedgehog concept]:
- What are you deeply passionate about?
- What can you be best in the world at?
- What d rives your economic engine?”
“The key is to understand what your organization can be best in the world at, and equally important what it cannot be the best at—not what it ‘wants’ to be best at. The Hedgehog concept is not a goal, or strategy, or intention; it is an understanding.”
For a great video summary of Collins’ book, including these concepts above, see https://youtu.be/Yk7bzZjOXaM.
- Collins, Jim. (2001) Good to Great. Harper Collins.
- Callibrain’s Video Review for ‘Good to Great’ by Jim Collins
- Nordic Business Forum’s ‘Good to Great’ video series parts 1, 2 and 3.